Prosecutor: Glock lawyer used role to steal money

KATE BRUMBACK, Associated Press

A Georgia prosecutor told jurors Wednesday that a former attorney for gun manufacturer Glock Inc. was essentially running the company's U.S. operations and used his position to steal millions from his employer.

In his opening statement, Cobb County Assistant District Attorney John Butters said Paul Jannuzzo and another ex-Glock executive used complicated schemes to steal from the Austria-based gun manufacturer. The two men created a sham insurance company to siphon payments into a personal offshore bank account, forged company founder Gaston Glock's signature, fabricated loan documents and pilfered corporate funds, Butters said.

They reported directly to Gaston Glock and used their high-ranking positions to divert company funds to their own accounts, Butters said.

"They basically were it in America, as far as running the company," Butters said of Jannuzzo and the other man, Peter Manown.

They are accused of stealing more than $5 million from the company and its holdings, according to court records.

Jannuzzo sat at a table with his lawyers John Da Grosa Smith and Robert Citronberg during Butters' opening. Smith and Citronberg deferred their opening statement until they begin to present their case.

Manown confessed to Gaston Glock nine years ago that he and Jannuzzo stole from the company. Glock began an internal investigation and turned over the details to Cobb County authorities in 2007. Manown was sentenced to 10 years probation after he pleaded guilty to three counts of theft and agreed to be interviewed by a Cobb County prosecutor and a Glock official. He is set to be the government's star witness in the case against Jannuzzo.

Jannuzzo has pleaded not guilty to the theft and racketeering charges against him.

Jannuzzo is also accused of stealing a gun from the company. After he quit working for the company in 2003, he still did consulting work on product liability lawsuits against Glock and was given a gun made by another company to examine as part of one of those cases, Butters said. When Glock asked for the gun back, Jannuzzo denied having it, but it was later discovered at his home when police were called to his condo to investigate an unrelated matter, Butters said.

Manown said in a 2007 interview with investigators that he stored most of the stolen money in an offshore bank account, but that he's not sure what Jannuzzo did with his money.

Jannuzzo was initially set to go to trial in October 2009 but fled to Mexico, according to court records. He didn't return until federal agents tracked him down in Amsterdam. He was extradited to the U.S. in May, and he's been in jail since. If convicted of all counts, he could face decades in prison.

Three other men linked to Glock are awaiting trial on charges of stealing from the firm in a separate case. James Harper, a former federal prosecutor hired by Glock to investigate fraud, and two members of his investigative team were charged with stealing about $3 million from the gunmaker. They have pleaded not guilty, and Harper has said the allegations were a misguided attempt by Glock to discredit him.